Effective on and after 1 January 2018, HKFRS/IFRS 9 was developed to make financial reporting for financial instruments more relevant and understandable. The reforms introduced by HKFRS 9 are consistent with requests from the G20, the Financial Stability Board and Others.

HKFRS 9 brings together the classification and measurement, impairment and hedge accounting phases of the IASB’s project to replace HKAS 39 Financial Instruments: Recognition and Measurement.

HKFRS 9 is built on a logical, single classification and measurement approach for financial assets that reflects the business model in which they are managed and their cash flow characteristics.

Built upon this is a forward-looking expected credit loss model that will result in more timely recognition of loan losses and is a single model that is applicable to all financial instruments subject to impairment accounting.

In addition, HKFRS 9 addresses the so-called ‘own credit’ issue, whereby banks and others book gains through profit or loss as a result of the value of their own debt falling due to a decrease in credit worthiness when they have elected to measure that debt at fair value.

HKFRS 9 also includes an improved hedge accounting model to better link the economics of risk management with its accounting treatment.

Speaker’s Bio

Edith is a Director in PwC’s Financial Services Risk and Regulation Team in Assurance Practice in Shenzhen and Hong Kong. She has over 14 years of professional experience in China and Hong Kong. Edith provides both assurance and advisory services to a wide range of financial institutions, specialising in banking, insurance, securities and capital market. She has accumulated extensive expertise in advisory services for IFRS 9 for insurers, banks, securities brokers and asset managers. She is also familiar with securities trading, treasury, corporate and retail credit, branch operations, financial reporting and regulatory compliance including capital rules and liquidity rules under Hong Kong Monetary Authority’s and Securities and Futures Commission’s regimes.